Assume There Is an Increase in the Number of Consumers

question 39

Multiple Choice

Assume there is an increase in the number of consumers in the market for a good sold by perfectly competitive firms that are initially producing the profit-maximizing level of output.For the individual firm,this would result in:

• A)a decrease in both price and the profit-maximizing quantity of output.
• B)a decrease in price and increase in the profit-maximizing quantity of output.
• C)an increase in both price and the profit-maximizing quantity of output.
• D)an increase in price and decrease in profit-maximizing quantity of output.

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Definitions:

Constant Sum Game

A situation in game theory where the gain or loss of utility for one party results in an exactly equal loss or gain for the other party or parties.

Equilibrium Outcome

The situation in which market supply and demand balance each other, and, as a result, prices become stable.

Pure Strategies

A strategy in game theory where a player chooses a single action or outcome consistently, rather than mixing between multiple options.

CD Changer

An electronic device that stores and plays multiple compact discs automatically, allowing users to switch between discs without manual intervention.